News

Higher Production Costs Reduced 2012 Farm Incomes

21 May 2013

IRELAND - A preliminary estimate of the Teagasc National Farm Survey results show that family farm income decreased by 15 per cent in 2012, bringing the average income figure for the farming sector to €25,483.

Speaking at the launch of the results in Dublin last week (Tuesday, 14 May), Dr Thia Hennessy, Head of the Teagasc National Farm Survey said: “While agricultural commodity prices remained relatively favourable in 2012, the inclement weather adversely affected production costs and crop yields. In particular, dairy farms were impacted by the wet summer and direct costs of production increased by 21 per cent.” She also stressed that “many farmers depleted their stock of winter fodder early last autumn and this is likely to have further negative implications for income this year.”

“The €25,483 is the average income for the full population of approximately 80,000 farms and this conceals the large variation that exists across the different farming enterprises. The average income on dairy farms was €51,648, compared to just €11,743 on Cattle Rearing farms,” said Brian Moran of Teagasc’s National Farm Survey.

Farming continues to remain highly reliant on direct support payments. The average direct payment per farm was €20,534 comprising 81 percent of farm income. The Single Farm Payment, which is currently the topic of negotiation in the ongoing Common Agricultural Policy talks, continues to be the most important component of direct payments. It comprises 58 per cent of farm incomes on average and over 80 per cent of income on cattle farms.

Low levels of profitability continue to be a problem for a large number of farms and only about one-third of farms are economically viable farm businesses. Almost 26,104 farm households are economically vulnerable, i.e. the business is not viable and neither the farmer nor the spouse works off the farm. The availability of off-farm employment opportunities continued to contract in 2012 and the number of farmers working off the farm fell for the sixth consecutive year. The proportion of farmers also engaged in off farm employment fell from 30 per cent in 2011 to 27 per cent in 2012.

Falling milk prices coupled with a significant increase in expenditure on feed stuffs led to a reduction of 24 per cent in the average income on dairy farms in 2012. However, 2011 was a particularly good year and the 2012 income still remains slightly ahead of 2010 levels.

Beef prices remained reasonably good in 2012, but again increased input expenditure eroded the gain in output, and income on cattle farms fell by 8 per cent. Following a poor harvest globally, grain prices were also quite strong in 2012. However the price increase was not sufficient to offset the poor yields and income on tillage farms fell by 4 per cent.